PG&E’s federal tax break would go to customers under new bill

State Sen. Jerry Hill, D-San Mateo, has introduced a bill to ensure that California utilities return savings from the federal tax break to customers.

Photo: Terray Sylvester, The Chronicle

The tax breaks California utilities receive from President Trump’s federal tax overhaul would be refunded to their customers, under a bill introduced in Sacramento Thursday.

The bill — SB 1028, from state Sen. Jerry Hill, D-San Mateo — would apply to companies that provide electricity, gas, water or in some cases telephone services. It would require the California Public Utilities Commission, which oversees such companies, to adjust customers’ rates within 90 days of determining how much each utility will save.

The amounts of money involved could be substantial. California’s largest electric utility, Pacific Gas and Electric Co., estimates it will save $500 million from the tax cut. PG&E, however, says the savings could be offset by increased spending the company anticipates to deal with winter storms and trees killed by the drought and the ongoing bark beetle infestation.

“We have already paid this tax, for PG&E, so we’re the ones who deserve and should get the refund,” Hill said. “It they want more money to do more work, then that’s what general rate cases are for, and they need to come before the California Public Utilities Commission and ask for it.”

The utilities commission has already said it wants the companies’ tax savings refunded to their customers.

The commission typically sets rates for each of California’s three large, investor-owned electric utilities in multiyear proceedings that take into account many of the companies’ expenses, not just their taxes. But a commission spokeswoman said in January that the agency might decide to move faster on the tax-cut issue, given the large amounts of money involved.

“This legislation will make sure that it does, in fact, happen,” Hill said Thursday.

PG&E spokeswoman Lynsey Paulo said the company was still reviewing the bill.

“However, we agree with the principle that tax reform should benefit customers and, toward this end, we proactively notified the CPUC on Jan. 5 that PG&E expects that tax reform will provide significant benefits for our customers,” she wrote in an email.

David Baker covers energy, clean tech, electric vehicles and self-driving cars for the San Francisco Chronicle. He joined the paper in 2000 after spending five years in Southern California reporting for the Los Angeles Times and the Daily News of Los Angeles. He has reported from wind farms, geothermal fields, solar power plants, oil fields and an offshore drilling rig in the Gulf of Mexico. He also visited Baghdad and Basra in 2003 to write about Iraq's reconstruction. He graduated from Amherst College and the Columbia University Graduate School of Journalism. He lives in San Francisco with his wife.